Capital Employed


DEFINITION of 'Capital Employed'

1. The total amount of capital used for the acquisition of profits.

2. The value of all the assets employed in a business.

3. Fixed assets plus working capital.

4. Total assets less current liabilities.


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BREAKING DOWN 'Capital Employed'

This is a term that is frequently used, but very difficult to define because there are so many contexts it can be used in. All definitions generally refer to the investment required for a business to function. By "employing capital" you are making an investment.

Also known as "funds employed".

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  1. As an investor in stock, how should I evaluate a company's capital employed?

    Before you evaluate a company's capital employed, you first need to nail down a consistent, working definition of capital ... Read Full Answer >>
  2. What does a high capital employed imply about risk?

    The four most common descriptions of capital employed are the total amount of capital that a company utilizes when acquiring ... Read Full Answer >>
  3. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  4. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  5. Are dividends considered an asset?

    Whether dividends paid on stock are considered an asset depends on which role you play in the investment: the issuing company ... Read Full Answer >>
  6. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>

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